Set against the backdrop of unprecedented levels of debt and deficit, this year’s “COVID-repair” Federal Budget has laid out the Australian Government’s ambition for the nation’s economic recovery.
It ticks the right boxes on driving business confidence and invests decisively in the recovery challenge. At the same time, however, we argue this investment should be leveraged further to drive stronger sustainability outcomes.
Unsurprisingly, jobs were the budget’s central theme. Each new initiative announced was quantified in terms of how much employment it was anticipated to generate. The biggest ticket item here was the new JobMaker Hiring Credit – an initiative to boost the employment prospects for out of work young Australians by offering employers a year-long cash incentive to hire them – which is forecast to create some 450,000 new jobs.
In terms of the budget bottom line, one of the most expensive measures announced was the expansion of the instant asset write off, predicted to cost a whopping $26.7bn. It was the centrepiece of what Treasurer Josh Frydenberg called “the largest set of investment incentives any Australian government has ever provided” and something we at GBCA have been advocating for as part of our package of built environment-based solutions to drive economic recovery.
The expanded tax incentive will enable businesses to capitalise on the jobs rich potential from major energy efficiency plant and equipment upgrades.
It complements the previously announced $52.2 million in funding to increase the energy productivity of Australia’s buildings delivered as part of the inaugural Technology Investment Roadmap and the $1.43 billion in continued funding for the Australian Renewable Energy Agency (ARENA), an important announcement for a critical entity whose future has not always been assured. It would be pleasing to see ARENA’s mandate expanded to focus on the substantial opportunities for emissions reduction offered by energy efficiency in the built environment.
While the “gas-led” recovery approach has caused considerable, and indeed understandable, controversy, the roadmap also includes some indisputably sensible initiatives. Looking to create a hydrogen economy is a good idea in the context of harnessing that fuel’s impressive potential for energy storage. Though expensive when used in a generation context, carbon capture and storage is useful for reducing emissions at an industry level when it comes to construction materials like cement and steel.
But however welcome these investments may be, technology on its own won’t suffice and other policies and measures will be needed to drive the shift to a low emissions economy.
In delivering what the Prime Minister categorised as the most important budget since the Second World War, the Government had an opportunity to also use its record spending to leverage greater sustainability outcomes.
Our satisfaction at seeing some long-fought-for policies adopted was tempered by a measure of disappointment that the Government is yet to realise the full potential a net zero transition that the built environment offers.
With investments in transport infrastructure now topping $110 billion, it is extremely important that they are delivered in a sustainable way through independent certification. This means stipulating more public value from the investments which we saw announced. While we welcome the timely investment in infrastructure, there is no indication that these projects will be tied to standards for better environmental performance or encourage more decarbonisation at the community level.
Done right, our response to the economic impacts of COVID-19 would not only minimise short to medium term pain, but also build the foundation for a healthier, more liveable and prosperous future.
The simple fact is that we need to go further, faster.
And there are a series of relatively quick and cost-effective policy wins ripe for the picking from implementing a uniform energy rating system for homes, to stronger, more robust appliance standards.
Government has a pivotal role to play in substantially lifting the bar for lower performers in the property industry as we push to decarbonise our built environment.
The leadership we have seen and helped foster at the top tier of sustainability champions from banks to brand name retail, big developers and local government, is critically important but it won’t get us all the way to our carbon neutral destination.
With work progressing on the Trajectory for Low Energy Buildings and a number of other laudable smaller investments announced in the Budget including investment in new electric vehicles, funding for measures to combat modern slavery and support for more Indigenous and affordable housing, we remain optimistic of continued progress.
Above all we remain determined to work collaboratively with governments at all levels to achieve the best outcomes for Australian communities, now and in a future that will demand more resilience than ever before.
That’s why we are so excited about the upcoming launch at the end of October of the new Green Star Buildings rating tool – the first to be released in our Future Focus suite.
Developed in close partnership with industry, this tool will take Green Star certification to a whole new level. It is entirely geared towards delivering highly efficient buildings, powered by renewables and designed for the future. Stay tuned for what will be one of the biggest evolutions in our approach since Green Star began.
And this progression is needed given how quickly the pace of change is accelerating.
It took 11 years to go from 1 certification to 1,000, three years to go from 1,000 to 2,000 but less than two years to reach the 3,000 Green Star certifications milestone we have now surpassed.
This extraordinary momentum is an impressive testament to our industry’s determination to drive sustainability at scale and will help carry forward the transition to the net zero carbon economy we need by 2050.
By Davina Rooney, CEO, Green Building Council of Australia